Average Directional Index - ADX:
An indicator used in technical analysis to determine the strength of a prevailing trend. The ADX is measured on a scale between zero and 100. Readings below 20 are used to indicate a weak trend, while readings over 40 indicate a strong trend. ADX is not used to determine the direction of a particular trend, but only to gauge its strength.
Traders use a move above 20 to suggest the start of a new trend (either up or down) and a move below 40 to suggest that the current trend may be coming to an end. The ADX is a derivation of two separate indicators known as direction momentum indicators (+DI and -DI). Unlike the ADX, these direction momentum indicators can be used to gauge trend direction and are commonly plotted alongside the ADX.
Bollinger Band:
One standard cliché in trading is that prices range 80% of the time.
The Bollinger band formula consists of the following:
BOLU = Upper Bollinger Band
BOLD = Lower Bollinger Band
n = Smoothing Period
m = Number of Standard Deviations (SD)
SD = Standard Deviation over Last n Periods Typical Price (TP) = (HI + LO + CL) / 3
BOLU = MA(TP, n) + m * SD[TP, n]
BOLD = MA(TP, n) - m * SD[TP, n]
